The deal was signed by Vanuatu’s prime minister Charlot Salwai and New Caledonia’s president Philippe Germain in Port Vila on Friday.
Air Vanuatu’s chief executive Derek Nice said it would allow the airline to increase flights and the size of aircraft used.
The airline’s New Caledonia passenger traffic has overtaken New Zealand for second place behind Australia.
Mr Nice said it was set to grow further with new routes beyond the existing Port Vila-Noumea flights.
“At the right time we can introduce new services from other airports in Vanuatu to New Caledonia. So it broadens the opportunity that we have to deliver air service and allows us to grow the level of service that we’re offering to meet the growing demand,” he said.
Vanuatu is currently completing upgrades to secondary international airports on Tanna in the south and Santo in the north which are said to be progressing well.
Port Vila’s airport upgrades are due for completion in June but the bulk of the work was finished in March.
SOURCE: RADIO NZ